Question

What was the EV/EBITDA multiple Amazon actual paid to acquire Whole Foods using EBITDA at 9/25/2016?  Use the data from Exhibit 1 for a top down EBITDA calculation (Starting from EBIT not Net Income), Depreciation & Amortization in fiscal 2016 of $498 million, and Amazon purchase price of $13.7 bln as the EV which includes Whole Foods debt (p.10 of the case).

A. 3.2x

B. 6.9x

C. 10.0x

D. 20.0x

(in $ millions except as stated) Whole Foods Costco Kroger Wal-Mart Wal-M Amazon Net sales Cost of sales Gross profit Operati

Please answer as soon as you reasonably can

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Answer #1

EV = $ 13.7 Bn

EBITDA = EBIT + Depreciation = 870 + 498 = $ 1.368 B

EV/EBITDA = 10.01 = approx 10 times

Answer is (C)

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